Trimac Delivers Improved Earnings

CALGARY, Oct. 29, 2015 /CNW/ - Trimac Transportation Ltd. (TSX: TMA) ("Trimac" or the "Company"), Canada's leader in bulk trucking, announces the release of its financial results for the three and nine months ended September 30, 2015 ("current quarter" and "current year") compared with the three and nine months ended September 30, 2014 ("comparative quarter" and "prior year").

Although Trimac continued to face revenue shortfalls during the third quarter compared to the prior year's third quarter due to the economic downturn from low oil and gas prices in the western Canadian provinces, it made significant inroads in the execution of its strategic plan which led to a 13.2 percent increase in earnings before income tax expense. This increase in earnings was the result of lower administration costs, reduced capital expenditures resulting in lower depreciation expense, and lower long-term debt balances resulting in lower interest costs.  Management estimates that Trimac is approximately 70% through the process of implementing operational excellence, with the majority of the remaining initiatives being implemented over the next 9 months. 

Highlights for the third quarter:

  • Earnings per share increased from 18 cents per share to 22 cents per share.
  • Operating ratio improved to 91.4% in the current quarter from 92.1%.
  • Revenue before fuel surcharges decreased 6.4% (or $6.5 million), primarily due to reduced economic activity in western Canada in the bulk trucking segment.
  • Selling and administrative costs decreased 7.0% over the comparative quarter from our continued focus on streamlining administration functions across all business segments.
  • Adjusted EBITDA decreased $0.9 million primarily due to the decrease in bulk trucking revenue.
  • Earnings before income tax expense increased $0.9 million for the current quarter due to a strong capital discipline which lowered capital spending, increased equipment disposals and resulted in lower depreciation. Increased gains on sale of equipment and lower interest costs due to reduced debt levels also contributed to the higher earnings.
  • Trimac reduced its long-term debt to $79.8 million with a debt to EBITDA ratio of 2.09.

CEO Succession

Mr. Jeffrey J. McCaig advised the Board approximately one year ago of his intentions to transition his Chief Executive Officer responsibilities.  Today Trimac is announcing the appointment of Mr. Mathieu Faure as the new CEO of Trimac Transportation Ltd. to be effective January 1, 2016.  Mr. McCaig will remain as Chairman of the Board and will be actively involved in the CEO transition.

Mr. Faure comes to Trimac with over 20 years of leadership experience within the North American transportation industry including 13 years of direct experience in trucking, initially with Group Paquin Inc. and then Groupe Robert Inc. His various management responsibilities covered all aspects of trucking & terminal operations and business development in Canadian and US markets.

In 2006, Mr. Faure joined Canadian Pacific Railway ("CP"), where he applied his experience to the retail, intermodal and transload markets with direct responsibility for multiple portfolios and numerous bulk commodities. Eventually Mr. Faure provided executive leadership for all global commercial activities of CP intermodal business including sales, profitability, strategy, marketing, business development, foreign offices and joint ventures.

Mr. McCaig commented, "Mr. Faure's 20 years of experience in truck, intermodal and rail transportation with proven operating and financial results will ensure that Trimac continues to be the premier bulk trucking service provider throughout North America."

Normal Course Issuer Bid

The Board of Directors of Trimac has approved the repurchase of up to 1,400,000 Class A Common Shares by Trimac.  The Board of Directors and management of Trimac believe that at the present time, and from time to time, the trading price of the Class A Common Shares on the TSX does not reflect the underlying value of the Class A Common Shares and that such repurchase is accretive to those shareholders of Trimac who continue to hold their shares.  Trimac will utilize available exemptions from the issuer bid requirements available under applicable Canadian securities laws and repurchase such shares pursuant to a normal course issuer bid through the facilities of the TSX, subject to the acceptance by the TSX of a Notice of Intention to Make a Normal Course Issuer Bid to be filed by Trimac.  On acceptance by the TSX, a copy of the final Notice of Intention can be obtained free of charge by shareholders of Trimac upon request.  Trimac expects to commence with the program in early November 2015 and a more detailed press release will be issued outlining the specifics of the Normal Course Issuer Bid.

Selected Financial Highlights


Three months ended Sept 30

Nine months ended Sept 30


(in millions of dollars, except per share data)

2015

2014

Variance

2015

2014

Variance

Financial Results










Revenue:











Bulk Trucking revenue before fuel surcharges

84.7

91.2

-7.1%

249.8

263.1

-5.1%


National Tank Services third party revenue

4.9

4.6

6.5%

16.2

13.3

21.8%


Bulk Plus Logistics



5.6

5.9

-5.1%

15.6

16.1

-3.1%






95.2

101.7

-6.4%

281.6

292.5

-3.7%


Adjusted EBITDA










Bulk Trucking



11.2

12.3

-8.9%

26.9

31.1

-13.5%


National Tank Services



1.1

1.0

10.0%

3.5

2.8

25.0%


Bulk Plus Logistics



1.3

1.2

8.3%

3.4

2.9

17.2%






13.6

14.5

-6.2%

33.8

36.8

-8.2%


Earnings before income tax expense:









Bulk Trucking



5.8

5.3

9.4%

10.0

10.8

-7.4%


National Tank Services



0.6

0.4

50.0%

1.9

1.2

58.3%


Bulk Plus Logistics



1.3

1.1

18.2%

3.1

2.5

24.0%






7.7

6.8

13.2%

15.0

14.5

3.4%


Share Information: 










Cash dividends declared per share


0.07

0.07


0.21

0.21



Earnings per share (basic)


0.22

0.18


0.42

0.40



Earnings per share adjusted


0.21

0.19


0.41

0.41














Other Information:










Operating ratio before interest & tax


91.4%

92.1%


94.0%

93.8%



Net property, plant and equipment additions

2.8

4.0


6.6

18.3











Ed Malysa, President and COO commented "We continue to implement our strategic initiatives and while revenue shortfalls continue to challenge us, we are making headway in our operational excellence initiatives.  We finished the third quarter with a positive upswing and I look forward to continued momentum in the fourth quarter to close out the year well positioned for a strong 2016."

Outlook

Economic projections estimate Canada's economic growth for 2015 to be low, therefore, we are not anticipating any real growth from our customers for the remainder of 2015 and into 2016 as low oil prices continue to impact the Canadian economy, predominantly in the western provinces.  Trimac will continue to focus on its operational excellence strategy and control costs.  We will be well positioned to maintain our profitability and gain market share in 2016.   

Declaration of Quarterly Dividend

The Board of Directors today, October 29, 2015, declared a dividend of $0.07 per common share, payable on January 15, 2016 to shareholders of record at the close of business on December 31, 2015.

Forward-Looking Statements

Certain information included in this news release constitutes "forward-looking statements".  Trimac cautions that, by their nature, these forward-looking statements are based on suppositions, risks, and uncertainties as well as on management's best possible evaluation of future events. Trimac cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and the actual results or performance of Trimac or the transportation industry may be materially different from the outlook or any future results or performance implied by such statements.  Please see "Forward-Looking Statements" in Trimac's MD&A for the three and nine months ended September 30, 2015 for a discussion of the material factors that could cause actual results to differ from the forward-looking information contained herein and the material factors and assumptions that were applied in preparing such forward-looking information.

Non-GAAP Financial Measure

Adjusted EBITDA, adjusted earnings per share and operating ratio are financial measures not prescribed by IFRS and may not be comparable to similar measures presented by other issuers.  Management considers these non-GAAP measures useful in evaluating the performance of Trimac's operations.  These measures should be considered in addition to, not a substitute for, the financial performance measures prepared in accordance with IFRS.

Profile

Trimac is Canada's largest provider of bulk trucking services with operations from coast to coast.  In addition, through its National Tank Services division, Trimac performs repairs, maintenance, trailer fabrication and tank-trailer cleaning services for both the Trimac fleet and for third party commercial customers. Trimac also provides third party transportation logistics services in Canada and the United States through its wholly owned subsidiary Bulk Plus Logistics.  Shares of Trimac Transportation Ltd. are traded on the Toronto Stock Exchange under the symbol TMA.

For more detailed information, please visit our website at www.trimac.com or SEDAR at www.sedar.com and review our MD&A and the unaudited condensed consolidated interim financial statements for the Company. 

You are invited to join us on a conference call at 9:30 a.m. Eastern Time on Friday, October 30th, 2015.  To join the call, please dial 1-866-696-5910 and enter pass code 4138670 at least 10 minutes prior to the start time of the call.  An audio playback of the call will be available starting Monday, November 2nd, 2015 on our website at http://www.trimac.com/page/eventscalendar.

SOURCE Trimac Transportation Ltd.

For further information: Edward V. Malysa, President & Chief Operating Officer, Trimac Transportation Ltd., Telephone: 403-298-5100, Facsimile: 403-298-5146; Scott D. Calver, Vice President & Chief Financial Officer, Trimac Transportation Ltd., Telephone: 403-298-5100, Facsimile: 403-298-5146

RELATED LINKS
http://www.trimac.com

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